J.C. Penney Co. Inc. has an extra $500 million to play with.
This story first appeared in the May 23, 2013 issue of WWD. Subscribe Today.
The troubled retailer finalized a five-year $2.25 billion term loan, which was arranged by Goldman Sachs and is secured by its real estate.
The loan is $500 million bigger than the financing package Penney’s laid out on April 29. The funds will be used for general corporate purposes and to pay off $242.8 million in debt coming due in 2023. Penney’s needed to clear that debt to make way for the larger loan and agreed to pay bondholders $1.45 on $1 of principal outstanding.
“We appreciate the strong demand from investors and their confidence in J.C. Penney’s future,” said Ken Hannah, chief financial officer. “This new funding gives us the financial flexibility to pursue our plans to put the company back on a path to profitable growth.”
All eyes now are on chief executive officer Myron “Mike” Ullman 3rd as he tries to rejigger the failed transformation effort by his predecessor, Ron Johnson.